Youlai Interactive Mobile Game plans to issue 500 million shares and is expected to become the first new stock to be transformed.
overseas page game giant Youlai Interactive announced the start of its IPO on Tuesday (December 5), with an offering volume of 500 million shares from December 5 to December 8.
original title: can the game market change overseas page game giant Youlai Interactive successfully?
with the rapid development of mobile games in recent years, the market share of PC games is constantly being eroded. Compared with client games that can compete with mobile games by virtue of high picture quality and rich content, they are slightly inferior in picture quality and content, and even inferior to the page games of mobile games. We can imagine the competitive pressure we are facing at present.
and it is at this juncture that overseas page game giant Youlai Interactive chose to list in Hong Kong. Judging from the current obvious decline trend of web games, transformation has become a top priority after Youlai Interactive is listed.
on Tuesday (December 5), overseas page game giant Youlai Interactive announced the start of its initial public offering, with an offering volume of 500 million shares from December 5 to December 8, of which 90% are international offerings and 10% are public offerings. there are also 15% over-allotment rights. The offering price ranges from HK $0.63 to HK $0.85 per share, with 4000 shares per share, which is expected to be listed on December 15.
strong > overseas page game giants face bottlenecks / strong >
it is said that the page game giant, in fact, most domestic page game players may not be familiar with the name Youlai and its main brand Game Hollywood, because the company's page game business mainly faces the Southeast Asian and South American markets. As of March 31, 2017, the company has about 44.1 million cumulative registered users in 168 countries around the world.
in the overseas distribution market of Chinese page games, Youlai does occupy the largest market share of 8.9%. At present, the company has released 25 web games and 26 mobile games in the international market. Two authorized online games and two self-developed mobile games will be launched in the first quarter of next year.
but the declining trend of web games in both domestic and international markets has been difficult to reverse. Domestically, according to the 2017 China Game Industry Development report recently released by the China Culture and Entertainment Industry Association, China's online game revenue declined significantly in 2017. The annual operating income was about 19.23 billion yuan, down 15.0% from the same period last year, accounting for 9.6% of the total online game market share.
in fact, after the growth rate of China's online game market reached its peak in 2013, it began to decline slightly year by year, and the growth has almost stopped since 2015. After explosive growth, it has entered a cooling-off period. In 2017, online games accounted for only 9% of the revenue of the domestic game industry.
in the international market, the market size of mobile games has grown rapidly from $13.2 billion in 2013 to 33.9 billion in 2016. In contrast, web games are not only unmatched in market size, but even the growth rate has completely stagnated.
as the growth of the global page game market slows, Youlai Interactive's revenue in the page game field has been declining year by year in recent years. It is reported that the company's page game revenue has shrunk by 50% from more than $20 million in 2014 to only $10.2 million in 2016. The share also dropped from 89.6% to 30.9%.
according to this situation, it is urgent for Youlai to transform into mobile games, and judging from the current proportion of the company's revenue, this is indeed the policy being implemented by the company: in the six months to June 30th this year, the revenue from mobile games has reached 92.5 million US dollars, which is more than twice that of page games. The proportion also reached 65.3%.
strong > whether mobile games can make a comeback / strong >
page games to mobile games is not a new topic. As early as the beginning of the rise of the mobile game market in 2012, some page games took the lead in testing the transition to mobile games. But at that time, the mobile game market was not optimistic, and even was almost evaluated as a bubble market by the whole industry, and many people predicted that it would eventually follow in the footsteps of page games.
however, in 2014, 24% of the market share of mobile games exceeded 17.7% of page games for the first time, which really ushered in a turning point, which also indicates that mobile games have completely defeated page games. In the face of data, major page game companies have embarked on the road of transformation.
however, from the three aspects of game development, operation and channel, the operation logic of web games and mobile games are completely different. In addition, China's mobile game market has entered a subdivided era, and the market competition is becoming increasingly fierce. The road of page game transformation is not destined to be smooth.
however, according to the data published by Youlai Interactive in its prospectus, the transformation of Youlai Interactive seems to have begun to bear fruit.
although Youlai Interactive is still in the stage of expanding its business to develop and release mobile games, and the increase in revenue costs has also led to a decline in the company's gross profit margin year by year, in the six months ended June 30, 2017, the company's gross profit margin still reached 55.4%, which is still at a high level in the industry.
like Youlai Interactive, Langang Interactive, a listed Hong Kong stock company that is transforming from page games to mobile games, had a gross profit margin of only 45% in the first half of the year, while Youlai ranked second in China's overseas issuance market by 0.1 percentage points. at present, A-share listed companies that are also trying page games to transform into mobile games have a gross profit margin of 43.43% and a net profit margin of 55.52%. The average gross profit margin is only 46.82%.
it is worth noting that even Tencent, which owns the comprehensive game "Arena of Valor", the gross profit margin of mobile games business in the first quarter of this year was only 60.9% (the gross margin was not disclosed in the semi-annual report), which is slightly higher than that of Youlai Interactive. According to the Tencent Financial report teleconference, the basic trend of game gross profit margin has gradually declined from 69.7% since the first quarter of 2014.
at present, the five mobile games that account for the largest share of Youlai interactive revenue are leisure shooting games. Among them, the "bullet Hall", which purchased the rights of page games from Seventh Avenue and developed them into mobile games, is mainly distributed in Brazil, with a market share of 81%. At the same time, it is also released in the Philippines, Canada, the United States, Turkey, Australia, Thailand and other markets.
two leisure shooting mobile games, "Gunny Mobi" and "MMOG", developed with the intellectual property elements of "Paytang", are mainly distributed in Southeast Asia, with "MMOG" reaching the top of the App Store Malaysia strategy game download list within 24 hours of its release in 2015.
in addition, Youlai Interactive's listing has also attracted heavyweights. Its cornerstone investors include Trilogic, which is wholly owned by Wang Yongchao, co-founder of China Mobile Games Entertainment Group, and Ho Jianfeng and Sun Yongshuang, family members of Macau gambling tycoon Stanley Ho, whose total subscription is likely to reach US $6 million.
in this regard, CEO Lu Yuanfeng also said that as a world-renowned game publisher, the company believes that it can help Macao's traditional industries and online industries to connect with each other, and does not rule out the possibility of cooperation between the two sides in the future.
faced with transformation as soon as it is listed, it seems rare in the Hong Kong stock market. According to past experience, transformation is often accompanied by labor pains. Whether Youlai Interactive can become the first successful new stock transformation remains to be seen.
Edit: mary